Mortgage interest rates in 2020 are the lowest since before World War II. With fixed interest rates below 2% on 30-year loans, many Danes are now cheaper to buy than rent. But which mortgage to choose? We take a closer look at this.
When you sit down and have to decide what type of mortgage to take, first of all, look at what interest rate you want.
Would you like to have a regular loan with a fixed interest rate and repayment and thus have security for future benefits? Or would you rather take e.g. 1-, 3- or 5-year interest rate adjustment loans?
Mortgages with fixed or variable interest rates
This decision is both about how much risk you want to take in your personal finances. For example, are you In a very stable job situation and generally stable economy, it may make sense to invest in the short and cheap interest rates on an interest rate adjustment loan.
However, they will always be arguments for both types of loans, which is why it is ultimately important to choose the loan that gives you the best gut feeling and that you are most comfortable with.
It is important to remember that you can never predict a rise in interest rates and that it will come so suddenly that you will not be able to repay your loan. At the same time, history shows that the lower the interest rate, the closer we are to a rise in interest rates.
Choice of maturity – 10, 20 or 30 years?
The lower the interest rate, the more you should pay off the loan. Eg. A 30-year fixed-rate bond loan is far cheaper than it was 10 years ago. Thus, the monthly benefit is very low. This means that you should pay more, as this gives extra room for repayment. By repaying extra, your residual debt reduces, thereby reducing your repayment risk of future benefit increases as a result of rising interest rates.
Specifically, our recommendation is that you look at your personal finances and consider what amount would make sense for you to spend on home loans each month. Then you can go to your preferred mortgage institution’s website to see what the 30 year loan costs. If the amount you can settle for will make sense in your / your personal finances higher than the monthly payment on your preferred loan type with a 30-year maturity, then you should consider reducing the maturity until they hit the amount that makes sense for your economy.
Basically, it is no more complicated than looking at how much revenue you are getting, how much money you have available here, and from this, calculate how much you can maximum pay off.
While it may be tempting for many to choose a very short term to become debt free as soon as possible, you should of course not put yourself too tight.
Choosing a mortgage lender
For individuals in Denmark can choose from the following mortgage credit institutions:
Mortgage Credit Denmark
Good Credit Denmark is owned by Good Finance Bank and thus it is ONLY possible to obtain a mortgage loan from Good Credit Denmark by applying to Good Finance Bank.
Good Credit is owned by a number of pension funds. Good Credit is both a bank and mortgage institution. This means that there will often be demands for full customer relationships, ie. that you also move your banking activities to Good Credit if you want a mortgage loan with Good Credit.
Declined for Mortgage?
Danish mortgages are a fantastic cheap loan form, and among the cheapest mortgages in the world. However, this has the unfortunate consequence that many Danes can no longer be credit approved to get a mortgage.
If you are rejected for mortgages, you should consider your alternatives. Mortgage loan loans can be a good choice here, although the type of loan is considerably more expensive than mortgage loans.
If you would like to hear more about your mortgage loan.